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One of the national Saab General Managers recently referred to me as possibly being one of those kooks on the internet (words to that effect). That’s fair enough. We’ve never met and he’s got a job to do. Better to not worry about what’s in the news when you’ve got a brand to resurrect.
This story ain’t about Saab Canada. I’ve softened on them a little in the last few weeks. This very quick rant is about our good friends at Cadillac in Europe, who I’m sure also dismiss me as some sort of kook.
I wrote perhaps the best piece I’ll ever write with regard to Cadillac in Europe back in September last year. It was called Saab vs Cadillac and I’m not going to reinvent the wheel by trying to rephrase it here.
My consistent line has been that the relentless development of Cadillacs for Europe has been a colossal waste of time and money. GM people consider that GM can’t be successful if Cadillac isn’t successful. They also consider that Cadillac is the only card in GM’s deck that can be played in the premium sector. I’ve had GM staff say those things to me.
And I think it’s crap.
Why am I re-hashing all this? Because Autocar have an interesting article about the demise of the Cadillac BLS:
Cadillac is to ditch its unsuccessful Saab-based BLS and build a striking new rear-drive saloon in its latest bid to rival BMW’s 3-series and Audi’s A4.
Called Project Alpha and due in Europe in 2011, the new car will be a key part of General Motors’ latest efforts to make Cadillac a global player. But it will use a rear-wheel drive platform that is currently under development in the US…..Project Alpha is part of GM’s plan to improve Cadillac’s image outside of the US. In Europe, the perception of Cadillacs as oversized V8 American barges is still putting off buyers.
I wonder if there’s a soul out there in GME land who’d be brave enough to tally up the total amount wasted on the development and promotion of the Cadillac brand in general, and the BLS in particular?
And you want to know the irony? If GM were brave enough to answer questions about this issue honestly, according to how they really feel, they’d tell you that Saab are lucky that Cadillac came along. That if it weren’t for the BLS, the 2008 Saab 9-3 wouldn’t be as good as it is.
They wouldn’t tell you that the 9-3 could be even better than it is if the money lost on Cadillac were channeled into the Saab line. Only that Saab have been lucky to get some scraps from Cadillac’s table.
GM – maybe it’s the meds talking, but sometimes you really give me the irrits.
If you’ve got to fix your big brands first, how long are Saab fans expected to wait around before you get to a brand that impacts your sales and your margins the least, despite the expertise you take from it and the potential it has for you?
17 responses so far ↓
1 Alex
// Apr 17, 2008 at 7:39 am
And this exact attitude is why I’m so skeptical about the GM-Saab relationship. Instead of blowing all of this money on a RWD BLS replacement that Cadillac MIGHT be able to sell in Europe, how about spending that money on developing a premium FWD/AWD platform.
Then, instead of trying to pass off Vectras as Saabs to the European buyers who on average are much savvier than their American counterparts, GM would have a truly Audi-quality platform above the econo-car Epsilon that they could build a real contender off of.
It’s not just about Saab, yes, I would love to see the days of Saab being forced to build luxury sports sedans on econo-car platforms come to an end, but this sort of platform could be shared across all of the brands, not just between the 9-3 and 9-5.
The problem is that Detroit will always have the final say, and the Detroit management are still stuck in the 50’s with delusions that Cadillac’s name means anything more than Saab’s in the global luxury market. So here’s the harsh truth; IT DOESN’T.
Sure, Cadillac was once the “standard of the world”, an American Mercedes, those days ended around the time that Poland was invaded and the brand has been in a tail-spin ever since. If GM wants Cadillac to regain it’s former glory, they need to try to out-Mercedes Mercedes and move the brand seriously upmarket.
Cadillac will never be percieved as sporty cars by the global market, so they should do what they do best: big and flashy. I was really disappointed when they axed the sixteen, a production version of that car for $70-100k with V12 and V16 engine options could have totally redefined the brand. At the opposite end of the line, offer the CTS as a larger E-class competitor starting at ~40-45k. In the middle, add a DTS/STS at ~50-60k that would compete with the Lexus LS and the Q45 and offer SUV’s like the Escalade that emphasize luxury and you round out the lineup nicely.
That way they could have left Saab to be what BMW used to be, a company that makes a really great, practical sports sedan. Start with a ~20k base 9-1 and top off the line with a 400+ hp 9-5 Aero for ~$55k, and throw in a sporty 9-4x that competes with the other sporty SUV’s out there the Cadillac+Saab dealerships suddenly start to look like a much, much better idea.
It’s not thinking like a Saab kook, it’s thinking with common sense.
2 NineTwoX
// Apr 17, 2008 at 8:17 am
I don’t know if these kind of decisions are based off of common sense or based off of extensive market analysis/research. Whatever it is, I bet it wasn’t done on a whim and GM must have its reasons.
Decisions like that just defy logic.
I agree with Alex that GM needs to better define Cadillac and Saab. The brands need to make sense how they fit together by what they offer.
3 Richo
// Apr 17, 2008 at 8:43 am
GM have had over a decade to do something right with Saab and they’ve failed with their strategies time and time again. Time to do something different!
“Decisions like that just defy logic”, perhaps but they don’t defy ego.
Hey, if it wasn’t for the US of A and the corporations like GM who back the government over there we wouldn’t have a war in Iraq. It’s just so typical of a US firm to completely ignore the reality of living in a world, instead of just a US world.
BMW and Audi are laughing all the way to the bank (and that’s a FACT!), and so are their customers!
4 Sam
// Apr 17, 2008 at 8:47 am
I have always thought that GM should promote Saab in Europe over Caddy. There are plenty of other places that Caddys can be sold. But I admit that I am not very savvy.
5 saab9x
// Apr 17, 2008 at 9:48 am
1. gm should have learned, from the 9-2/7x’s, about the probable consequences of re-badging.
2. a new bls, to compete with the 3-series and the a4 in europe, is heightened competition for saab. bad. but, hopefully the next-gen saabs will minimize any negative impact of the bls.
3. i don’t think a new bls is gm’s cure in europe. it’s difficult to “retool” perception. gm will still look insincere and “two-faced.” but on the other hand, if euro-caddys can fatten gm’s coffers, then more funds can trickle-down to saab, especially if the euro stays strong. that, of course, begs the seminal issue, i.e., gm spending money to develop a cadillac niche in europe (and then using the proceeds to help saab), vis-a-vis, using that same funding to better develop saab–without using a bls “middleman.” the former hasn’t been working.
4. swade, “…paranoia will destroy-ya….” and by the way, i wish there were more “kooks” on the internet that a) spur saab sales; and b) give the brand much needed visibility. also, you foresaw that the saab-themed bls wouldn’t sell in europe. what kooky insight, that!
6 Troll96
// Apr 17, 2008 at 10:40 am
Richo: Criticize GM all you want but spare us the undergrad political commentary. What’s next…9/11 was an inside job?
7 Frank A
// Apr 17, 2008 at 11:21 am
As I have said before, GM makes money in Europe so they know how to make and sell cars Europeans want. The problem is SAAB and Cadillac in Europe are not compatible. I still think GM’s plan is to move Opel up a notch (See the new Insignia and Meriva, watch for the new Astra), sell SAAB and have Caddy as their world wide luxury brand. I don’t know if this will work, but it sure looks like the path they are heading down. GM has too many brands to commit the type of ad dollars that each brand needs.
8 Alex
// Apr 17, 2008 at 11:27 am
And Saab would round out the lineup of a company like Renault-Nissan or PSA perfectly, and don’t rule out a Porsche buyout either
9 Kroum
// Apr 17, 2008 at 11:36 am
Troll96, 9/11, the Saab 9-1X… Am I onto something here?
On topic, I don’t see GM succeeding with Cadillac in Europe, however, a few years ago I would have said the same thing about Chevy, and look at its success now.
I also don’t necessarily see Caddy as being bad for Saab, as long as the latter is not underfunded because of the former. But I do understand and support Swade’s criticism.
10 Frank A
// Apr 17, 2008 at 11:40 am
I don’t see Porsche buying. They have Audi which is doing very well, they recently bought a controlling interest in VW. I still think PSA makes the most sense. They do not have a luxury brand, nor are they in North America. SAAB would fix that nicely. Nissan is bringing Infiniti to the rest of the world, including Europe, I don’t see them complicating that strategy.
11 Kroum
// Apr 17, 2008 at 11:50 am
Frank, I personally cannot see Inifini succeeding in Continental Europe, so I would not rule Nissan out in the medium term. Although I don’t think they will make for a better parent than GM. The Japanese know as little about “premium European” as GM, if not less.
The sheer fact that they created a pseudo-luxury brand based on NIssans and sold it to status-seeking North Americans who care more about number of cup holders and cylinders than fuel economy and ergonomics (not to mention brand history), means nothing to me. (And sorry for over-generalizing, but as a North American I am allowed to).
12 Alex
// Apr 17, 2008 at 11:56 am
Infiniti could likely be another Cadillac or Lexus when it comes to European sales, so don’t count out a Renault buyout. The Europeans seem like they are just as skeptical about Japanese luxury cars as they are about American ones, so Infiniti could likely crash and burn.
Factor in Renault’s repeated failed attempts to move upmarket as well as their dedication to edgy, distinctive, “love em or hate em” designs and top-notch FWD cars, and I think they would be a perfect new parent for Saab.
13 turbin
// Apr 17, 2008 at 12:23 pm
Will people please give up on the GM selling Saab idea.
Saab is now almost completely borg. By 2011 all Saabs will be fully integrated GM products under the skin. Saab is now do or die, it cannot be disconnected from GM except as sale of brand-name only. If that happens then the name buyers would have to go down the same path as GM and reskin some other cars at enormous cost and over many years losing what momentum the Saab name has left.
14 Alex
// Apr 17, 2008 at 12:54 pm
Jaguars and Land Rovers make extensive use of Ford products in their platforms, and that didn’t stop Tata. It likely wouldn’t stop GM from unloading Saab either, as long as Trollhatten has some production capacity.
What we’d likely see is the new buyer continuing to build Saabs on their current platforms for the rest of their projected model lives. A year or two into new ownership you’d probably see the electrical bits, some switchgear and the engine/transmission/ECU equipment switch over to a new in-house engine setup. Look at what happened to the Range Rover when Ford bought LR from BMW, it still had the BMW engine and electronics for a few years while Ford engineered an all-Ford version of the car.
If anything, building up all of this energy and good PR for the brand would be a great way to gear up for unloading it. You have to spend money to make money, and giving Saab a more modern and viable lineup would make it far more appealing to prospective buyers. Right now I doubt Saab is worth $600 million, if that, but with the new 9-5, the 9-4x, and the next-gen 9-3 and the 9-1 on the horizon, I think the company would be worth more like $2-3 billion. So don’t count out a Saab sale, it’s still a distinct possibility as far as I can see.
15 Jeff
// Apr 17, 2008 at 2:50 pm
The fact that this car is coming isn’t really news. Cadillac has been planning a sub-CTS car for 2 or so years now. That it’s going to go to Europe first, however, is a bit of a surprise. Either way, I hope it gets the V6 from the CTS, along with some turbo Ecotecs and a turbodiesel. I mean, I don’t see what the problem is. The new CTS is generally considered to be at least as good as the current 3 series. Unfortunately, it’s the size of a 5 series. If Caddy can take a 3-sized car and make it as good as the CTS, they’ll have a hit, and I really believe that. I think that the whole reason that this car is coming to Europe is because someone finally HAS tallied up the losses for Cadillac, and they’re trying a different approach. I hope it works out, I really do.
I don’t like GM’s attitude that Saab should consider it lucky to get Cadillac’s leftovers, but I understand it. Can any of you really imagine GM putting Cadillac before Saab in any part of the world…ever? I doubt it. Hell, if I were the head of GM, I’d want to try and make Cadillac successful first, too, because it’s Cadillac. Sure, they should dump their money into Saab in Europe instead, I know that, but I’m also not going to delude myself into ever thinking it’s going to happen. GM will try this new 3dorado, and if it works out, and Cadillac makes some money, then maybe Saab will get some attention.
But I doubt it.
But even so, it’ll be much more likely to happen if the new Caddy succeeds. If it fails, they’ll probably try again. GM is stubborn like that.
Alex – I’m not going to explain how wrong you are about the history of Cadillac in the US…but you are. I don’t think that GM thinks Cadillac’s name means any more than Saab’s in the global market, but I definitely think that they want it to. Also, I don’t like the idea of Renault buying Saab. I’m worried that the same exact thing will happen: They’ll try to rebadge Renaults as Saabs and sell them for a premium in a desperate attempt to move upmarket. When it doesn’t work (again), they’ll just cannibalize sales from each other.
16 Simon S
// Apr 17, 2008 at 11:52 pm
I think it could be an interesting precedent to see what Tata does to Jaguar and LR. At first I was horrified at the thought but now I’m not so sure. The head of Tata is no fool and like many Indians the board respects the company’s history.
Just maybe the Jag/LR brand will flourish despite the inevitable teething problems.
As for Saab – same deal, to me the worst thing is an American company owning a brand they can’t relate to nor understand. As said I’ll wait and see on Tata but the RR and Bentley brands are doing fine in European hands.
Renault is not a nice thought, especially with heavy government intervention, the thought of the Chinese buying out Saab is a nightmare – watch those quality ratings drop below minus… I don’t know the fit, like Swade I wish Audi had somehow got Saab but that won’t happen.
I just can’t see a long-term fit for Saab in GM’s range and the further push for Caddy acceptance in Europe – or even here in Australia shows amazing ignorance on behalf of Detroit.
Here in Australia our home grown Commodores are better built, offer more power and better cred than the aptly named BLS. Let alone Europe…
How many readers of this site would turn to a Caddy if Saab disappeared altogether? Or would you go for the Audi/3-5 Series/Honda etc route? I would.
Somehow Ford hasn’t made a meal of Volvo but I feel GM’s sale is a matter of when not if – and yes agree expanding the line-up could boost company value.
But sell to who? Will GM give up the premium sector in Europe? They’d have to as I can’t see Caddy’s ever cutting it there if they can’t in rough n’ tough Australia.
I really hope Saab is in good hands in a decade but who knows? These are sad days for a Melbourne Footy Club supporter and Saab driver:-(
17 Jon
// Apr 18, 2008 at 5:44 am
I dont think its fair to say the Saab got Caddy’s left overs. They way I see it the BLS is a Saab. But an ugly one.
As I understand it, when GM starved Saab of cash for spending to much on the 9-3’s development GM went to Saab and said “Seeing as you have made the 9-3 unique to Trollhattan and it cant be built anywhere else build us a FWD Caddy for Europe based on the 9-3″
Saab’s enginieers have been very clever. Yes the 2008 9-3 would not be as good as it is, if it were not for the BLS, but I believe Saab knew the BLS would flop, took the money and made the BLS and took the best bits for the 9-3.
I think if GM had not give Saab the money to design and build the BLS, GM would have continued to starve Saab of cash.